US Personal Computer Industry
Presented by : Leslie Ling
Philip Lam
Winnie Liu
PC Industry Development
1975 : Humble beginning as
hobby computer kits in the
spring of 1975
1990’s
Tech boom
AMEX Computer Hardware Index (INDEX) 2002-2004
5 Year Comparison between NASDAQ
and NASDAQ Computer Index
1 Year Comparison between NASDAQ
and NASDAQ Computer Index
S&P500 vs. Computer Industry
PC Market Segments ( by products)
U.S. and Worldwide PC Market Segments
Unit Sales
1990
1995
2000
2003
2005
2008
U.S. PC Server Sales (#M)
0.04
0.51
2.5
2.7
3.3
4.2
U.S. Desktop PC Sales (#M)
8.4
16.8
33.1
31.3
34.3
35.2
U.S. Mobile PC Sales (#M)
1.1
4.1
10.4
14.2
19.0
23.2
Worldwide PC Server Sales (#M)
0.06
0.94
5.5
7.1
9.4
13.4
Worldwide Desktop PC Sales (#M)
21.7
47.1
96.2
102.1
116.9
135.3
Worldwide Mobile PC Sales (#M)
2.4
10.0
27.9
40.1
54.6
74.0
PC Market Segments (by regions)
U.S. and Worldwide PCs-in-Use
and PC Sales Per 1,000 People
Table 1.3 U.S. and Worldwide PCs-in-Use and PC Sales Per 1,000 People
1990
1995
2000
2003
2005
2008
U.S. PC Sales Per 1,000 People
38.2
81.0
163.5
165.0
188.9
201.8
U.S. PCs-in-Use Per 1,000 People
192.2
324.1
629.5
744.0
788.4
867.9
Worldwide PC Sales Per 1,000 People
4.6
10.2
21.4
23.7
28.0
33.4
Worldwide PCs-in-Use Per 1,000 People
18.7
39.8
86.1
117.0
138.7
175.2
World wide PC Vendor Market
Share
2003 Market Share (%)
Dell
15%
Hewlett-Packard
14%
59%
5%
4%
3%
IBM
Fujitsu/Fujitsu
Siemens
Toshiba
Others
US PC Vendor Market Share
2003 Market Share (%)
27%
42%
19%
3%
4%
5%
Dell
Hewlett-Packard
IBM
Gateway
Apple
Others
U.S. and Worldwide PC Market
Growth
250
225
U.S. PC Sales (#M)
200
Worldwide PC Sales (#M)
175
150
125
100
75
50
25
0
1975
1980
1985
1990
1995
2000
2003
2005
2010
U.S. and Worldwide PC Market
Growth
U.S. PC Revenues ($B)
Worldwide PC Revenues ($B)
350
300
250
200
150
100
50
0
1975
1980
1985
1990
1995
2000
2003
2005
2010
Business Models
Big Box Stores vs. J.I.T. delivery



Continuous Innovation
Cost Leadership
Differentiation
Own Brand Retail stores
Consulting
Stripped Service – White Boxes
Business Models
Big Box Stores vs. J.I.T. delivery



Low-cost Leader
Product Differentiation
Continuous Innovation
Own Brand Retail stores
White Boxes Competition
PC Life Cycle
Customers demand convenience and value for
their money
The need for speed has been diminished
(Ebay)-market for second-handed machine
Replacement cycle changed from every 2-3
years to every 5 years
Machines are upgradeable
Key Success Factors
Innovation – R&D “TABLET PC”
Product differentiation
Branding
Competitive pricing
Constantly reexamine the way to do
business
After sales service
Extensive product and service lines
Future Consideration - Threats
Commodity like market


Products differ very little
Constant downward price pressure
Death of the PC
Longer replacement cycle
Future Consideration - Trends
Branching out into ancillary services – IBM
Global expansion
Acquisitions and mergers
Switch to Linux

Cheap and open source operating software
Look for smaller, cheaper and more taskspecific pieces
Demand for wireless products
International Business Machines
Mission Statement
“At IBM, we strive to lead in the creation,
development and manufacture of the industry's most
advanced information technologies, including
computer systems, software, networking systems,
storage devices and microelectronics.
We translate these advanced technologies into value
for our customers through our professional solutions
and services businesses worldwide.”
Company History
• IBM was incorporated in the state of New York on
June 15, 1911 as the Computing-TabulatingRecording Company (C-T-R)
• C-T-R's name was formally changed to International
Business Machines Corporation (IBM) on
February 14, 1924
• 1944- Automatic Sequence Controlled Calculator
• 1950s- IBM 701, IBM 650 Magnetic Drum Calculator,
FORTRAN
• 1960s- System/360, Customer Information Control
System (CICS)
• 1971- Floppy Disk
Management Team
Samuel Palmisano- Chairman of
the Board, President, CEO; 31
years at IBM
Nicholas M. Donofrio- Senior VP, Technology &
Manufacturing; 37 years at IBM
Doug T. Elix- Senior Vice President & Group Executive, Sales
and Distribution; 35 years at IBM
Mark Loughridge- Chief Financial Officer, Senior VP; 27 years
at IBM
Edward Lineen- Senior VP, General Counsel; 34 years at IBM
Abby Kohnstamm- Senior VP, Marketing; 11 years at IBM
J. Randall MacDonald- Senior VP, Human Resources; 4 years
at IBM
Products
• Hardware: Servers, storage, personal systems,
printing systems
• Software: DBS (Information Management), Lotus,
Tivoli, WebSphere
• Services: Comprehensive IT services
• Finances: leading provider of financing and asset
management services to companies selling or
acquiring IT related products and services
• Research: Develop, market and deliver leading
chip technologies and services
New Strategies
• Continual Innovation of IBM
• Growth-driven
• Reduce presence in retail PCs, application software,
hard disk-drives… etc.
• On-demand business strategy
• Creating new leadership instead of defending existing
ones
• Supply Chain Improvement
• Business Transformation Outsourcing
• Acquisitions
• Growth in Emerging Countries
Revenue by Business
Segment
Revenue by Areas
33%
Americas
22%
Europe, Middle
East & Africa
Asia Pacific
OEM
42%
3%
Stock Summary
Exchange
NYSE
Index Membership
S&P 500, Dow Jones Industrials
Last
94.45
52 Week High
100.43
52 Week Low
81.90
Average Daily Volume
4.908 million
Shares Outstanding
1.665 billion
Market Capitalization
157.2 billion
Trailing P/E
20.10
Dividend Yield
0.80%
Institutional Ownership
55.40%
Book Value/ Share
17.84
1-Year Price Trend
1-Year Comparison with DJ
Computer Index
5-Year Price Trend
5-Year Comparison with DJ
Computer Index
Balance Sheet
Income Statement
Cash Flow Statement
Revenue (5-Year)
100,000
90,000
89,131
83,334
85,089
83,067
81,186
1999
2000
2001
2002
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
Revenue
2003
Net Income (5-Year)
9,000
8,000
7,000
6,000
5,000
7,359
7,874 8,146
7,613
5,334
Net Income
4,000
3,000
2,000
1,000
0
1999 2000 2001 2002 2003
EPS (10-Year Trend)
5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
1994
1995
1996
1997
1998
1999
2000
EPS
2001
2002
2003
ROE & ROA (10-Year Trend)
ROA
ROE
45
40
35
30
25
20
15
10
5
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Pricing Ratios (10-Year)
35
30
25
20
15
10
5
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Price to Book
P/E
Profit Margin (10-Year)
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Profit Margin
First 3 Quarters of 2004
1st Quarter 2nd Quarter
Sales
3rd Quarter
22,250
23,153
23,429
Gross Operating Profit
9,191
9,652
9,807
Net Income
1,602
1,988
1,800
Diluted EPS
0.93
1.16
1.06
Comparing to 2003:
• Revenue increased by 9%
• Pretax income increased by 10%
• Diluted EPS increased by 13%
Growth Comparison
40%
35%
30%
IBM
25%
20%
15%
Industry:
Diversified
Computer
Systems
10%
5%
0%
3rd Quarter
Sales
5-Year Sales
Average
EPS (YTD)
Price Comparison
30
25
20
IBM
15
Industry:
Diversified
Computer Systems
10
5
0
P/E
Price/Sales Price/Book
Profitability Comparison
45
40
35
30
25
IBM
20
15
Industry: Diversifed
Computer Systems
10
5
0
Current Current 5-Year
Gross
Profit
Gross
Margin Margin Margin
5-Year
Profit
Margin
Financial Condition Comparison
18
16
14
12
10
IBM
Industry
8
6
4
2
0
Debt/Equity Current
Ratio
Leverage Book Value
Ratio
per Share
Return Comparison
35
30
25
20
IBM
Industry
15
10
5
0
ROE
ROE (5-Y
Average)
ROA
ROA (5-Y
Average)
Executive Compensation
Summary
Stock Option & SAR Grants
in Last Fiscal Year
Options / SAR Exercised
& Year-end Values
Earnings Estimate
Estimated EPS
Growth Rate
2004 Q4
2005 Q1
2004
2005
1.74
1.07
4.99
5.52
11.53%
14.73%
15.08%
10.44%
Earnings Growth Rates
IBM
Industry
S&P 500
5.30%
5.30%
3.20%
2005
10.20%
10.20%
6.40%
Next 5 years
10.30%
15.10%
6.00%
Last 5 Years
Strengths and
Weaknesses
Strengths
•
•
•
•
•
•
Earnings growth in the past year has increased rapidly
Good Performance in 2004
High consistency across the board
Good future growth prospects
Stable dividend income
High profit margin
Weaknesses
• Strong Competition
• Higher debt ratios than industry average
• High goodwill
Analysts’ Recommendations
Our Recommendation
HOLD
Present by Winnie Liu
HP: Agenda
>> Qualitative Analysis
- Managment
- product
- market position
- major competitor
>> Key developments and Analysis
- HP & Compaq Merger
>> Fundamental analysis
- Ratio analysis
- Financial statements analysis
>> Recommendation
<<<<
Qualitative Analysis
>> Management
>> company's activities
--- product
--- market position
--- major competitor
Management
>> Carly Fiorina :
--- Chairman and CEO
--- Joining HP in July 1999
--- Prior to joining HP, spent
nearly 20 years at AT&T
and Lucent Technologies
--- Fiorina has previously
served on the boards of
Cisco Systems, Kellogg
Company and Merck &
Company.
Main executive team
>> Gilles Bouchard,
--- CIO & Executive Vice President of Global Operations
--- Joined HP 1990.
>> Robert P. Wayman,

CFO & Executive Vice President &

Joined HP 1969.

a member of the Policy Council of the Tax Foundation , the
Financial Executives Institute and the Council of Financial
Executives of the
>> Shane V. Robinson,

Executive Vice President and Chief Strategy and
Technology Officer

Joined Compaq 2000.

was senior vice president and chief technology officer of Strategy
and Technology at Compaq Computer Corporation

also spent seven years at Apple Computer Corporation
>>>>
>> Desktops & workstations
>> Notebooks & tablet PCs
>> Printing & multifunction
>> Handheld devices
>> Monitors & Projectors
Products
>> Fax, copiers & scanners
>> Digital photography
>> Entertainments
>> Storage
•HP is the second largest PC
•vendor with 16.2% of the
•worldwide market in the Q3 2004.
•In the United States, HP holds
the No. 2 position with 20.3
percent of the market
•HP Commands No. 1 Position in
Worldwide Notebook PC Market
>>>>
•#1 in total disk storage
systems*
•#2 globally in notebook PCs*
•#1 globally in Pocket PCs*
•#1 in customer support**
•#1 position in customer
satisfaction for ProLiant servers
Market position
•#1 globally in inkjet, all-in-one
and single-function printers,
mono and color laser printers,
large format printing, scanners,
print servers, and ink and laser
supplies*
•#1 globally in x86*, Windows*,
Linux*, UNIX* and Blade
servers**
<<<<
HP: major competitors
HPQ
DELL
IBM
Industry
Market Cap:
60.64B
99.79B
157.23B
37.90M
Employees:
142,000
53,000
319,273
126
Rev. Growth (ttm):
29.10%
17.10%
9.80%
13.80%
Revenue (ttm):
79.90B
47.26B
94.74B
36.95M
Gross Margin (ttm):
24.48%
18.22%
37.10%
35.04%
EBITDA (ttm):
4.76B
4.37B
15.33B
-382.00K
Oper. Margins (ttm):
5.20%
8.56%
11.22%
1.12%
Net Income (ttm):
3.50B
3.12B
8.11B
-768.00K
EPS (ttm):
1.149
1.21
4.703
N/A
PE (ttm):
17.48
33.03
20.08
26.32
PEG (ttm):
1.30
1.31
1.89
1.25
PS (ttm):
0.77
2.13
1.67
1.16
Key development & Analysis
2001: HP and Compaq Computer Corp. agree to a $21
billion merger. The Hewlett family voices its opposition to
the deal, as do various employees and shareholders.
2002 May: Despite opposition, HP completes its
purchase of Compaq, which the firm claims will result in
$2.5 billion in savings. Cost cutting measures include the
elimination of overlapping products and 15,000 jobs.
Key development & Analysis
HP AND COMPAQ MERGER
Before Merger
Hewlett-Packard
Compaq
Founded: 1938
Founded: 1983
Employees: 86,200
Employees: 63,700
2001 Revenues: $45.2bn
2001 Revenues: $33.5bn
2001 profits: $408m
2001 loss: $785m
CEO: Carly Fiorina
CEO: Michael Capellas
Key development & Analysis
HP AND COMPAQ MERGER
May 7, 2002 the largest merger in the history
of computer industry
Value of the deal at $25 billion
1 Compaq share = 0.6325 HP share
Change ticker symbol from HWP to HPQ
Compaq brand essentially disappear
Key development & Analysis
After Merger
HPQ
Year 2002:
Projected annual revenue: $78.7 billion
actual : $56.6billion
Number of employees: 150,000
actual : 145,000
Number of planned layoffs: 15,000 over two years.
Board of directors: Seven members from the old HP,
five from Compaq.
1. Financial Summary
company symbol
HPQ
exchange
NYSE
Last Price (11/09/04)
20.08
Change
-0.18
% Change
-0.89%
Volume
10,307,000
Avg Daily Volume
10,391,818
Day's High
20.34
Day's Low
20.08
52 Week High
26.28
52 Week Low
16.08
Fundamental Data
P/E
17.48
Earnings/Share
1.06
Dividend/Share
0.32
Current Div. Yield
1.59%
Market Cap.
60.64B
Tot. Shares Out.
3.02 Bil
Financial Analysis
Five-Year REVENUE Figures
Growth Rates %
HP
Industry
S&P 500
Sales (Qtr vs year ago qtr)
8.9
2.3
11.3
Sales (5-Year Annual Avg.)
12.33
4.25
4.8
EPS(3 year)
Earnings Per Share - Quarterly Results
FY (10/04)
FY (10/03)
FY (10/02)
1st Qtr
$0.30
$0.24
$0.25
2nd Qtr
$0.29
$0.22
$0.12
3rd Qtr
$0.19
$0.10
($0.67)
4th Qtr
NA
$0.28
$0.20
$0.78
$0.84
($0.10)
HP
Industry
S&P 500
EPS (YTD vs YTD)
43.5
35.8
26.6
EPS (Qtr vs year ago qtr)
97.3
-10.7
12.1
EPS (5-Year Annual Avg.)
NA
-19.37
0.48
Total
Growth Rates %
Hewlett-Packard Company:
Earnings Estimates (EPS)
Hewlett-Packard Company:
Earnings Growth Rates
Earnings Growth
Rates
Next 5
Years
Last 5 Years
FY 2005
FY 2006
05 P/E
HP
-4.40%
10.80%
14.70%
10.70%
15.50
Industry
-4.40%
10.80%
14.70%
12.50%
18.80
S&P 500
3.20%
20.10%
6.40%
6.00%
17.80
P/E Ration
Costs and Revenue Control
Profit Margins %
HP
Industry
S&P 500
Gross Margin
27.3
36.5
47.7
Net Profit Margin
4.2
4.6
7.6
5Yr Gross Margin (5-Year Avg.)
30.2
39.4
47.5
5Yr Net Profit Margin (5-Year
Avg.)
3.5
5.4
5.6
ROE
Investment Returns %
HP
Industry
S&P 500
Return On Equity
8.4
11.3
14.5
Return On Equity (5-Year
Avg.)
7.8
15.1
12.1
Financial statement Analysis
>> Income statement
>> Balance sheet
>> Cash flow statement
>> Revenue & Profit
Income statement
Net revenue
Costs and expenses:
Cost of sales
Research and development
Selling, general and administrative
Amortization of purchased intangible assets
Restructuring charges
Acquisition-related charges
In-process research and development charges
Total costs and expenses
Earnings from operations
Interest and other, net
Gains (losses) on investments
Dispute settlement
Earnings before taxes
Provision for taxes
Net earnings
Twelve months ended
October 31,
2004
2003(a)
$ 79,905 $ 73,061
60,340
3,506
11,024
603
114
54
37
75,678
4,227
35
4
(70)
4,196
699
$ 3,497
53,858
3,651
11,012
563
800
280
1
70,165
2,896
21
(29)
2,888
349
$ 2,539
Net revenue break down
Revenue Breakdown by segment
Net Revenue
Enterprise Storage and Servers
Software
HP Services
Technology Solutions Group
Imaging and Printing Group
Personal Systems Group
Financing
Corporate Investments
Total Segements
Twelve months ended
October 31,
2004
2003
$
Eliminations of inter-segement net revenue
and other
Total HP Consolidated
$
15,152
922
13,778
29,852
24,199
24,622
1,895
449
81,017
$ 14,593
774
12,357
27,724
22,569
21,210
1,921
344
73,768
-1,112
-707
79,905
$ 73,061
Earning break down
Twelve months ended
October 31,
2004
2003
Segment Contribution of Operating Income
Earnings from operations:
Enterprise Storage and Servers
Software
HP Services
Technology Solutions Group
Imaging and Printing Group
Personal Systems Group
Financing
Corporate Investments
Total Segements
$
173
-145
1,263
1,291
3,847
210
125
-178
$ 5,295
$
142
-190
1,362
1,314
3,596
22
79
161
$ 4,850
Balance sheet
October
31,
October 31,
2004
2003
$12,663
$14,188
Short-term investments
311
403
Accounts receivable, net
10,226
8,921
Financing receivables, net
2,945
3,026
Inventory
7,071
6,065
Other current assets
9,685
8,351
42,901
40,954
Property, plant and equipment, net
6,649
6,482
Long-term financing receivables and other assets
6,657
8,030
19,931
19,250
$76,138
$74,716
ASSETS
Current assets:
Cash and cash equivalents
Total current assets
Goodwill and purchased intangibles, net
Total assets
Balance sheet (ctn)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and short-term borrowings
$2,511
$1,080
Accounts payable
9,377
9,285
Employee compensation and benefits
2,208
1,755
Taxes on earnings
1,709
1,599
Deferred revenue
4,348
3,665
193
709
9,632
8,545
29,978
26,638
Long-term debt
4,623
6,494
Other liabilities
3,973
3,838
37,564
37,746
$76,138
$74,716
Accrued restructuring
Other accrued liabilities
Total current liabilities
Stockholders' equity
Total liabilities and stockholders' equity
Cash flow
Cash flow (con’t)
Price History
RECOMMENDATION
•The annul EPS is
above industry annul
EPS
•The projected earning
growth rate is below
industry average
•The revenue growth
rate is above industry
revenue growth rate
•Although the current
profit margin is higher
than the previous year,
it’s still below industry
average margin
•Second position in the
industry
•P/E to growth ratio
suggested stock might
have been overvalued
Recommendation
HOLD
DELL INC
Company Overview





Founded in 1984 by Michael Dell
Direct sales model
Offers an extensive selection of software
and peripherals
Sell its products worldwide and
manufacture in six location throughout the
world
Rank #1 in worldwide market share with
18.3% and also #1 in US market share
with 33.3%
Direct Sales Model

Communicate directly with our customer
• In person, via Internet or by phone
• In 2001, sales via Internet reach $50 million
per day

Five basic tenets:
•
•
•
•
•
Build-to-order
Low-cost leader
Most efficient path to the customer
Standards-based technology
Single point of accountability
Products and Services

Products:
•
•
•
•

Desktop and notebook computers
Servers and workstations
Storage, printing and imaging system
Software, peripheral and networking products
Services:
• Managed and professional services
• Deployment and support services
• Training and certification services
Executive Compensation Summary
Revenue by Product Line and
Region
Net Revenue
2004: 1-yr. growth rate:
17.1 percent
50
41. 4
40
31. 9
30
20
31. 2
35. 4
25. 3
18. 2
12. 3
10
0
1998
1999
2000
2001
2002
Net revenue (in billions)
2003
2004
Net Income
2004: 1-yr.growth
rate: 24.6%
3
2.6
2.5
2.2
2
1.5
1.5
1
2.1
1.7
1.2
0.9
0.5
0
1998 1999 2000 2001 2002 2003 2004
Net income (in billions)
Operating Expenses
Earning per Share
$1.20
$1.03
$1.00
$0.84
$0.80
$0.82
$0.68
$0.60
$0.53
$0.40
$0.48
$0.32
$0.20 $0.17
$0.00
1997
1998
1999
2000
2001
2002
2003
2004
ROE
80
70
73
65. 9
62. 9
60
50
43. 5
39. 8
% 40
31. 4
30
42. 1
26. 5
20
10
0
1997
1998
1999
2000
2001
2002
2003
2004
Average Price to Earnings
80
70. 8
70
59. 2
60
50
45. 2
51. 4
40
33. 2
26. 1
30
20
29. 6
14. 9
10
0
1997
1998
1999
2000
2001
2002
2003
2004
Valuation Ratios Comparison
35
30
33.03
29.27
25
17.06
20
15
8.77
10
2.13
5
0
P/E (ttm)
1.91
P/Sales (ttm)
P/Book (mrq)
Dell
Industry
Financial Strength (mrq)
1. 36
1.4
1.2
1. 112
1
0.8
Dell
0.6
0. 42
0.4
0. 086
0.2
0
Current Ratio
Total Debt/Equity
Industry
Profitability (ttm)
10
9.66
8.56 8.83
8
6.61
6
Dell
Industry
4
2
0
Operating Margin %
Net Profit Margin %
Management Effectiveness (ttm)
60
51.48
50
40
31.59
30
20
Industry
15.92
9.08
10
0
ROA %
Dell
ROE %
Growth
50
47.2
40
30
25.6
20.4 22.4
20
14.6
17.9 18.5
Industry
10
1.9
0
This Year Next Year
(11/2004) (11/2005)
Last 5
Years
Dell
Next 5
Years
Worldwide Growth
Cash Flows Data Summary (in millions)
Period
Net cash flows from operating activities:
2003
2000
4195
Net cash flows from investing activities:
(2814) (1381) (2260)
(757)
Net cash flows from financing activities:
(1383) (2025) (2702) (2305)
85
3538
2001
3797
Net (decrease) / increase in cash and cash
equivalents:
3670
2002
591 (1269)
1101
Cash and cash equivalents at end of period:
4317
4232
3641
4910
Net free cash flows:
3160
2973
3008
2785
Net free cash flows: Cash flows from operations less capital expenditures less tax benefit from employee
stock plans
10 year Price Chart
1 year Price Chart
1 year comparison to NASDAQ
Computer Index
2 year chart with indicators
Current Financials
As of November 19, 2004
Company Symbol
DELL
Exchange Market
NASDAQ
Price
$39.97
52 Week High
$40.97
52 Week Low
$31.14
Volume
Market Cap
12,951,300
99.79 B
EPS
$1.21
P/E
33.03
Analyst Recommendations
(www.zacks.com)
DELL INC. (NASDAQ)
Analyst Ratings
Current
One Month Ago
Two Months Ago
Three Months Ago
1.73
1.81
1.65
1.57
11
11
12
12
Buy
8
8
8
7
Hold
5
4
4
3
Sell
0
0
0
0
Strong Sell
0
1
0
0
Consensus (Mean)
Strong Buy
Average Recommendation (1=Buy, 5=Sell)
Recommendation

Dell’s fiscal 2004 was the most successful
year of the 20 year since their founding:
• Product shipment grow 26%, nearly three
times the average of other companies
• Revenues increased 17% to $41.4 billion, while
total sales by the rest of the industry declined
• Operating expenses accounted just for 9.7%, it
was the lowest full year rate in the history
• EPS were up 26% to $1.01; competitors lost
money
Recommendations (Cont.)

For the 26 weeks ended 7/30/04:
• Revenues rose 20% to $23.25 billion

Reflect increased product shipments in all
geographic markets
• Net income rose 36% to $1.53 billion


Reflects a leveling off of R&D expenses
From the analysis, the growth was
expected to continue in the
upcoming years
Recommendations (Cont.)
BUY